3 Highly Profitable Companies Reporting Earnings Next Week With Bullish Options Sentiment

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 |  Includes: JWN, MASI, MDSO
by: Kapitall

The put/call ratio is a helpful indicator of the sentiment surrounding a stock – when the ratio falls, it implies that fewer options traders are bearish about the company.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We ran a screen on companies reporting their Q2 earnings next week for those that are highly profitable, beating their industry peers on gross, operating, and pretax margins. We then screened these stocks for those seeing significant decreases in their put/call ratio over the last ten trading days.

Do you agree with options traders on these names? Use this list as a starting-off point for your own analysis.

List sorted by decrease in put/call ratio.

1. Masimo Corporation (NASDAQ:MASI): Medical Appliances & Equipment Industry. Market cap of $1.53B. Earnings to be released on 8/09. TTM gross margin at 71.47% vs. industry gross margin at 65.21%. TTM operating margin at 22.40% vs. industry operating margin at 15.88%. TTM pretax margin at 22.09% vs. industry pretax margin at 12.05%. Put/call ratio has decreased 59.26% over the last ten trading days (from 1.89 to 0.77). The stock is currently stuck in a downtrend, trading 16.21% below its SMA20, 16.97% below its SMA50, and 19.69% below its SMA200. It's been a rough couple of days for the stock, losing 9.45% over the last week.

2. Nordstrom Inc. (NYSE:JWN): Apparel Stores Industry. Market cap of $10.41B. Earnings to be released on 8/11. TTM gross margin at 42.58% vs. industry gross margin at 35.52%. TTM operating margin at 11.89% vs. industry operating margin at 8.04%. TTM pretax margin at 10.51% vs. industry pretax margin at 6.92%. Put/call ratio has decreased 22.32% over the last ten trading days (from 1.12 to 0.87). The stock has gained 40.44% over the last year.

3. Medidata Solutions, Inc. (NASDAQ:MDSO): Healthcare Information Services Industry. Market cap of $455.79M. Earnings to be released on 8/09. TTM gross margin at 73.96% vs. industry gross margin at 43.64%. TTM operating margin at 14.06% vs. industry operating margin at 10.62%. TTM pretax margin at 14.36% vs. industry pretax margin at 7.63%. Put/call ratio has decreased 16.42% over the last ten trading days (from 4.69 to 3.92). The stock is currently stuck in a downtrend, trading 15.45% below its SMA20, 17.07% below its SMA50, and 20.06% below its SMA200. It's been a rough couple of days for the stock, losing 10.06% over the last week.

*Profitability data sourced from Fidelity, options data sourced from Schaeffer’s, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.